The Reserve Bank of Zimbabwe (RBZ) says financial inclusion is a significant catalyst and essential contributor to financial sector stability and inclusive economic growth.
Speaking at the 2024 Annual National Financial Inclusion Conference held in Victoria Falls last week, RBZ Governor, Dr John Mushayavanhu, said financial exclusion contributed to serious risks and potential threats to the stability of the financial sector and the integrity of financial systems.
"Inclusivity is good for financial stability because once segments of the population are excluded, there is the potential of running parallel market activities that have a destabilising effect on financial sector stability," said Dr Mushayavanhu.
He noted that financial inclusion fostered a strong and resilient society in which all individuals have equal opportunities to engage in the nation's economic activities and make meaningful contributions to the national goals of sustainable and inclusive economic growth.
"This then positively influences the enhancement of a country's domestic capital base while diminishing reliance on external capital flows and the associated risks from external shocks," said the Governor.
To establish inclusive financial systems, the RBZ has been collaborating with the Ministry of Women's Affairs, Community, Small and Medium Enterprises Development to ensure that this vital demographic group is financially included and able to contribute equitably to sustainable wealth creation.
"As you may be aware, women account for the majority of the population in Zimbabwe, and yet they remain largely financially excluded.
"The micro, small and medium enterprises (MSMEs) are the backbone of this economy, contributing more than 60 percent towards the country's GDP, and the majority of the MSMEs are owned by women, and yet even they too are still largely financially excluded," said Dr Mushavavanhu.
Additionally, the RBZ, as a member of the Alliance for Financial Inclusion (AFI) Gender Inclusive Finance Committee (GIFC), has played a key role in the development of the newly launched global Gender Inclusive Finance Policy and is actively working on applying the recommendations and international best practices in gender-inclusive finance.
The 2022 FinScope MSME and Consumer Surveys indicate that savings and credit cooperatives (SACCOs) are essential for improving financial access for women and their MSMEs, yet data on the actual performance of these cooperatives remains scarce.
In this context, the central bank has been collaborating with the Ministry of Women's Affairs, Community, Small and Medium Enterprises Development to establish a framework for monitoring the performance of the SACCOs sector and incorporating its contributions into national statistics.
"Our joint vision is to see large bank-like SACCOs graduating to become SACCO banks as is the case in some jurisdictions both in the developed and developing world," he said.
Dr Mushayavanhu said that financial inclusion transcended borders, and exchanging information, knowledge, and best practices was crucial for the successful implementation of various financial inclusion policies and initiatives.
He said the RBZ and the Ministry of Finance, Economic Development and Investment Promotion were part of the global Alliance for Financial Inclusion and actively participated in various working groups and board committees that create knowledge products and best practices related to financial inclusion.
The RBZ said that platforms offered by AFI, such as peer learning, peer reviews, and the annual Global Policy Forum, had strengthened the knowledge and practices within the central bank and the Ministry of Finance, Economic Development and Investment Promotion, leading to better access to finance for marginalised and underserved populations.
"The bank is also collaborating with other regional bodies and institutions such as SADC, African Development Bank, under the AFAWA ( Affirmative Finance Action for Women in Africa) project, Afreximbank in respect of Factoring as a form of financing projects, among others," Dr Mashayavanhu.
He highlighted how the emergence of digital financial services and platforms had brought new opportunities for marginalised individuals who have been reliant on unregulated and costly informal financial systems.
He noted that the arrival of fintech companies and other new players in the sector had the potential to improve financial stability by integrating segments that would otherwise remain in the informal economy.
"The Reserve Bank of Zimbabwe, in collaboration with stakeholders such as POTRAZ, has adopted proportionate regulatory and supervisory approaches that facilitate effective management of risks without stifling innovation.
"Further, the RBZ and other financial inclusion stakeholders are embarking on extensive digital financial literacy awareness campaigns on cybersecurity risks," added Dr Mushayavanhu.
Banks have thus been instructed to bolster their cybersecurity risk management systems and improve consumer protection to build trust and safeguard the integrity of the financial services sector, amid the growing adoption of digital financial services.
The RBZ has further added policy directives to advance financial inclusion by exempting bank charges on designated transactions.
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"Cognisant of the need to better serve NFIS target segments and for fair and affordable bank charges, the Reserve Bank of Zimbabwe directed nanking institutions to refrain from imposing monthly bank maintenance or service charges for individual bank and SME accounts with a conservative daily balance of US$100 and below or its equivalent in ZiG for a period of up to 30 days.
"Furthermore, in order to promote digital transactions, electronic transactions of less than US$10 or the ZIG equivalent, were exempted from bank charges, with effect from 1 September 2024."
According to the Monetary Policy Statement of April 5, 2024, banking and microfinance institutions were mandated to outline initiatives aimed at enhancing the access and utilisation of financial services by persons with disabilities, focusing on both physical and ICT infrastructures.
As technology increasingly transforms the financial services sector and promotes financial inclusion, the RBZ instructed banking institutions to implement digital financial literacy programmes to improve the uptake and usage of digital financial services.
"Financial and digital literacy and education, together with sound consumer protection mechanisms, will ensure that underserved segments in our country are empowered and protected to make informed financial decisions," Dr Mushayavanhu said.
